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If The Bush Tax Cuts Expire, How Much More Would You Have To Pay?

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The discussion of the Bush-era tax cuts is one of the most reliable political footballs in recent memory. And with the December 31 deadline for the last two-year extension of the cuts looming, we can expect the debate to continue up to and through the election.

What does that mean to you and me? It all depends on where you live? CNBC’s calculations show that Mississippi taxpayers will fare better than most people, but they still are looking at an increased tax liability of just over $1,300 (per household) for the year. Connecticut residents are on the other end of the scale and may be hit with a tax increase of almost $6,000 (per household) if the Bush tax cuts expire.

Feeling as if they had actually accomplished something, both the House and Senate left town for recess. However, based on the deep divide between the parties, it is doubtful that an agreement on extending the tax cuts in any form will happen before the coming election. CBS News reports that this is all “political theater” and quotes GOP Senator Mitch McConnell framing the situation this way:

“[T]his is more about messaging or passing the buck than it is about helping anybody or preventing an economic calamity at the end of this year.”

Political theater aside, the clock is ticking on the tax cuts and the debate on the impact of keeping them in place or letting them die, rages on. If nothing is done, the Congressional Budget Office estimates that our economy in the first six months of 2013 could continue to sputter and contract as much as 1.3%.

What happens to you if the cuts expire? The Tax Foundation has done the math and provides a handy map to show the likely economic impact on people in every state. (For the record, the Tax Foundation describes themselves as, “a nonpartisan tax research group based in Washington, D.C.”)

The Five States Facing The Biggest Tax Increases (avg. per household):